October 11, 2006

Conab sees 2007 Brazilian wheat imports at 7.8 million tonnes

Brazil will need to import 7.8 million tonnes of wheat in 2007 because of domestic crop losses in the winter wheat crop in 2006, the president of Brazil's National Commodities Supply Corp (Conab) said in an exclusive interview with the local Estado newswire on Tuesday (Oct 10).

Conab president Jacinto Ferreira said Brazil would likely need to import extra wheat from countries that are not traditional suppliers of wheat in the Brazilian market. He told Estado that Brazil would import more wheat from Canada next year. Brazil's no. 1 supplier, Argentina, is expected to harvest around 12 million tonnes, down from the 16 million tonnes initially expected.

The vast majority of Brazil's wheat imports come from neighbouring countries and trade partners in the Southern Cone Common Market, or Mercosur. The government is considering changing wheat import tariffs from non-Merocsur nations. A Trade Ministry meeting is scheduled for Oct 17, but a press official at the Ministry told Dow Jones Newswires on Monday that she could not confirm whether wheat was on the agenda.

Brazil produced under 3 million tonnes of wheat in the 2006 crop. Brazil plants wheat in the winter months. A surprise cold front in September destroyed nearly a third of the wheat crop in Rio Grande do Sul state, the second leading producer, with similar estimates being made in Parana, the no. 1 producer. Original estimates put the winter wheat crop at 4.8 million tonnes.

"If we harvested 3 million tonnes of wheat this winter it would be a lot," Luis Quimelli, a head broker at Agricampo, a wheat trader in Parana state, told Dow Jones Newswires.

Quimelli said if prices in the US were competitive, Brazil would import US wheat as well.

"The only reason we won't have supply problems is because we will increase imports drastically. It's going to come from whoever can supply us with the right price," Quimelli said.

Brazil consumes roughly 10.5 million tonnes of wheat per year.